Australians think it's a good time to purchase property, despite thinking house prices will fall further, Westpac survey reveals

Australians think it's a good time to purchase property, despite thinking house prices will fall further, Westpac survey reveals

Westpac's monthly consumer sentiment survey reveals most Australians believe now is the best time to buy a house, despite thinking house prices will fall further still.

Image by REIA

Pictured: Malcolm Gunning, REIA President

Image supplied by Propertyology

Pictured: Simon Pressley, Head of Research at Propertyology

CoreLogic

Pictured: Tim Lawless

The bank's monthly consumer sentiment survey reported an 11.8 per cent surge in respondents thinking now is the right time to buy a house - 17 per cent higher than a year ago.

New South Wales residents are leading the charge, increasingly keen to take advantage of falling prices. The state's 'time to buy a dwelling' index surged by 26 per cent - a figure that hasn't been seen in five years.

Westpac chief economist Bill Evans says this suggests the decline in Sydney house prices is "starting to generate some interest from buyers".

The results of the survey come after a sharp slide in national house prices, which have now fallen 3.5 per cent, according to CoreLogic data.

CoreLogic's Head of Research, Tim Lawless says this signals the weakest macro-housing market conditions since February 2012.

"With such broad-based weakness in housing market conditions, it’s clear that tighter credit availability is acting as a drag on housing demand and impacting adversely on the performance of housing values across most areas of the country," Mr Lawless told WILLIAMS MEDIA.

According to the Westpac survey, consumers are expecting house prices to fall even further, with expectations of house prices declining by 2.3 per cent to equal the weakest level seen on the index.

"The house price corrections underway in Sydney and Melbourne now look to be firmly embedded in consumer expectations," Mr Evans said.

Not all doom and gloom

Head of Research at Propertyology, Simon Pressley is quick to point out that it's not all doom and gloom for the property market.

According to research conducted by Propertyology, of the 110 Australian cities and towns with a population of 20,000 or more people, property prices increased in more than half of them over the past 12 months.

"From a capital city perspective, Hobart has now produced three very strong years, including 19.3 per cent growth over the year ending September. Hobart’s median house price is still an affordable Hobart $478,491 and there’s significant pressure pushing rents higher. Adelaide, Brisbane and Canberra are also in positive growth territory," Mr Pressley told WILLIAMS MEDIA.

Difficulties accessing credit to put a dampener on some buyers

Mr Pressley says the downward trajectory of national housing finance approvals is a much deeper issue than falling property prices in Sydney and Melbourne.

“The grip that APRA has on national credit supply is so tight that we now have a significant blockage in a major artery of the economy. If the Federal Government don’t quickly intervene, much of the good work of the past few years will be quickly undone, and 25 million Australians will pay the price,” Mr Pressley told WILLIAMS MEDIA.

President of the Real Estate Institute of Australia (REIA) says the latest housing finance figures are reflective of this.

“There is no bright spot in the latest figures with the continued decline in housing finance reflecting the slowing market, APRA restrictions which with hindsight were probably excessive, the fallout from the Royal Commission into Banking and concerns about changes to property taxation and its impact should there be a change in Government," Mr Gunning told WILLIAMS MEDIA.

“I estimate that APRA’s actions have directly resulted in a 5 to 7 per cent drag on property prices nationally over the last 12 months. But, make no mistake, if the Federal Government doesn’t intervene very soon there will be a big knock-on effect to the economy,” Mr Pressley told WILLIAMS MEDIA.